It’s unfortunate that many small to medium-sized businesses go out of business within the first five years. According to statistics compiled by the Small Business Administration (SBA), about half of all businesses with employees fail within the first five years.
There isn’t usually one sole reason that businesses fail. Any given business is likely to have several reasons for having to close up shop. Some of these reasons will be out of the business owner’s control, but not all of them.
Many small business owners turn to professional employer organizations (PEOs) to help beat the odds. If you’re interested in learning more about how a PEO can help your business survive, call us at (678) 376-1212 to speak with one of PEO brokers. We can help match you with the right PEO to not only help your business survive, but to thrive.
Poor Business Planning
For many entrepreneurs, starting a business is uncharted territory. Many people who have the desire to start their own business don’t have a background in business management or accounting. While this doesn’t mean it’s impossible for someone without an MBA to start a successful business, a lack of proper planning can snowball into increasing problems down the line.
Hiring Difficulties
As companies land new clients, they will have an increasing need to have extra hands to help keep up with demand. It can be tempting to want to hire people you know, but that isn’t always the best recipe for business success. Your business needs individuals with the right skills to handle the work, but you will also benefit from having people with differing backgrounds contributing to your success. New viewpoints are an excellent driver of innovation, which new small to medium-sized companies need to thrive.
Not Delegating Tasks
Once you start hiring employees, it’s important that you trust them to be able to accomplish the work properly. Many business owners get caught up making sure things are done the way that they are used to doing them and get frustrated when their employees start doing things a little differently. This ends up making the business owner overwhelmed by tasks that should be in other people’s hands, which will spell doom for the company.
Promotion is Necessary
You may have the best product or service in the world, but your company isn’t going to stay afloat without people knowing about it. You need to get the word out about your business somehow. This could be through traditional advertising means, like flyers and billboards, or it could be through digital means. Without a means of getting new clients, your company will cease to grow and will likely close its doors sooner rather than later.
Reliance on a Single Contract/Client
A lucrative contract or client can be helpful, but overreliance can be problematic for your small business. A contract or client who is responsible for a large chunk of your revenue stream can take autonomy away from you, as your business comes to rely on that cash flow in order to keep the other bills paid. If a single client or contract is responsible for 25% or more of your revenue stream, you should likely be focusing your efforts on bringing in more business.
What a PEO Can Do to Help Your Company
PEOs offer an excellent opportunity for business owners to get assistance from experienced accounting and HR professionals. Partnering with a PEO will cost you a fraction of the price of hiring in-house professionals to help manage your payroll, benefits administration, and even devising recruitment strategies for bringing in the best talent.\
According to research conducted by the National Association of Professional Employer Organizations (NAPEO), small and medium-sized companies that choose to partner with a PEO end up doing better than companies who choose to go it alone. Whether it’s in terms of employee turnover (up to 14% less), growth (up to 9%), or survival (around 50%), a PEO can bring many benefits to your company.
Want help finding the PEO that’s right for your business? Call (678) 376-1212 to schedule an appointment with one of our PEO brokers. We’ll get to understand your company’s needs and help you find a PEO partner that can address your unique business needs. Our services are completely free to you, so don’t wait to call today!
